Apple has issued a press release reiterating its commitment to return some of its extremely large cash pile to shareholders, saying that Apple management and the Board of Directors are in "active discussions" about how to return cash to shareholders.

By early last year, Apple's cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.

We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.

Apple's management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital's current proposal to issue some form of preferred stock. We welcome Greenlight's views and the views of all of our shareholders.

Apple's stock price rose sharply in the minutes following the release.

Keep the 2.7% dividend. You are going to need the cash for future technology and legal battles ahead. Just grow the stock value by delivering products we don't know we want yet. If you do, and the stock price growth reflects it, I doubt anyone is going to miss the dividend.

Keep the 2.7% dividend. You are going to need the cash for future technology and legal battles ahead. Just grow the stock value by delivering products we don't know we want yet. If you do, and the stock price growth reflects it, I doubt anyone is going to miss the dividend.

I'm european so the dividend is taxed twice, i lose a total of 35% on tax. I hate that, a stock buyback would be better or just invest in a new daughter company to build a self sustained tech-city or something, its a crime not to do something bold with that kind of cash.

Keep the 2.7% dividend. You are going to need the cash for future technology and legal battles ahead. Just grow the stock value by delivering products we don't know we want yet. If you do, and the stock price growth reflects it, I doubt anyone is going to miss the dividend.

You don't need billions for legal battles. Apple spends a lot on lawyers, but it doesn't add up into several billion a year. Even the largest US lawfirm only pull in about $1 billion in revenue and that is with a thousand plus lawyers working full time. You're just thinking in the wrong order of magnitude on legal costs. Now losing legal battles I guess there could be damages. But Apple hasn't really lost anything that significant ever.

Apple is already funding R&D fine. None of this money is being used on R&D, there are huge amounts of cash coming in every week, so there is going to be plenty of money for R&D in the future. No one is suggesting skimping on R&D, but the fact is that Apple can't think of anything to spend this money on. And the scale of this money (I suspect a billion dollars is more than you really realize) means you can't spend this money hiring engineers and software developers, those folks just aren't that expensive.

And with iPad mini and iPhone 5 getting into China, there is just gobs of money coming down the pipe. The tablet market is just getting started. Apple still struggles to fulfill demand for the iPhone during launch quarters. There is plenty of room for growth in revenue and margins are staying strong. It is a great problem to have but it remains silly for Apple's board to just keep sitting on this cash. Remember, they had a $40 billion cash pile at the end of 2008. They never used that money, it has just continued to be added to.

How? Do you suggest they go to the R&D store and say, "I'd like to order $20 billion in research please."

Assuming an engineer or software developer costs about $250,000 in salary and $250,000 in yearly supplies, office space, equipment (pretty large assumption) that would require hiring 40,000 new R&D folks. Setting aside Apple's retail stores, that would more than double the current number of Apple employees. Where would you find all these engineers and software developers.

But research and development of what? They spend $2.5 billion per year as it is. $2.5 billion are already paying a bunch of very smart people excellent wages to come up with new ideas.

What should they do next? Find more smart people? Hire some astrophysicists? More scientists? More graphic designers? More poets, what? What is the next frontier of incredible stuff that we do not know that we need yet?

To me, it comes back to this. When we have back-and-forths about "innovation" like this, stuff like screen size is barely a blip on the radar. When I hear stuff about the interface being "boring" or "tiring," I am mystified -- I honestly wonder how one expects a smartphone operating system to entertain them?

Basically preferred shares get paid first at a specified dividend, before other shares, but they can't vote.

So for example you may see AAPL A shares, and AAPL B shares, with Apple maybe pays $10/share dividend and trades at $450. Apple B shares is 'guaranteed' to pay say $20/share and trades at a different price.

The result is A shares have volatile growth, and usually lower dividend; and B shares have set dividend and stable stock price.

Institutional investors, such as pensions (and people that want stable income) often like preferred because it adds a base, predictable ROI, and provides them with some potential growth.

Some people want the volatility because they want to cash in on the growth aspect of the company (non-preferred are better suited for this).

> what is it bad?

Because it 'guarantee' to the preferred shareholders is at cost of non-preferred shareholders and even at the cost of future opportunities. So if Apple, one day has flat earnings (for whatever reason) and needs money - they must still honor the preferred shares even if it means cancelling or altering strategic plans.

What Einhorn suggests makes sense, because he and others probably believes that Apple can sustain a consistent higher return, without need to borrow, for the long term. But more importantly his proposal is to vote against the blocking of preferred shares... he wants all options opened and considered (ie, don't rule it out)

On the otherhand, it could just be a ploy to get short term gains (because Einhorn has been incredibly successful by hedging).